Bully tactics aside – is it finally time to exonerate Chevron?

May 7, 2014

Chevron is a litigation bully that has employed relentless tactics in 20 years of litigation against villagers in the Ecuadorean rainforest, where the oil giant’s predecessor Texaco once drilled for oil. The Ecuadoreans deserve to live in better conditions, without fear that oil waste continues to pollute their soil and water. I believe both of these assertions to be truth. I do not believe they are causally connected. Chevron’s pattern of exploiting the weaknesses of its adversaries — especially in its recent and overwhelmingly successful campaign in U.S. courts to discredit the villagers’ $9 billion Ecuadorean judgment against the oil company — does not necessarily mean Chevron is responsible for cleaning up the Lago Agrio oil field.

As recently as last year, I didn’t think the fundamental question in the Ecuadoreans’ case would ever be answered. No one would ever know for sure, I thought, whether Chevron had contaminated the land and injured the people of the Lago Agrio. Chevron’s bulldog lawyers at Gibson, Dunn & Crutcher had amassed copious evidence that the verdict in Ecuador was hopelessly tainted by fraud. U.S. District Judge Lewis Kaplan of Manhattan recounted that evidence in a 497-page ruling in March that concluded the Ecuadorean verdict was “obtained by corrupt means.” But even Kaplan acknowledged the tragedy that misconduct by the villagers’ lawyers would forever obscure the truth or falsity of their claims. We’ll never know, Kaplan said, whether the villagers might have been able to prosecute a legitimate case against Chevron.

I am increasingly convinced that they could not have.

On Wednesday, their lawyers at the Washington, D.C., firm Patton Boggs surrendered to Chevron in abject fashion. Patton Boggs, which entered the Lago Agrio case in 2010 and was quickly ensnared in its own litigation with Chevron, agreed to pay the oil company $15 million and to assign its interest in the Ecuadorean judgment to Chevron. The firm said that its two lead partners in the Lago Agrio case, James Tyrrell and Eric Westenberger, would submit to depositions by Chevron lawyers at Gibson Dunn, and that it would turn over discovery materials to Chevron, under the supervision of Judge Kaplan.

Chevron even demanded terms for Patton Boggs’s public statement on the settlement, which is part of the written agreement. The final words in that statement are ones you will not often see a law firm utter: Patton Boggs “regrets its involvement in this matter.”

It’s true that Patton Boggs was at Chevron’s mercy. Partners have been defecting from the firm, and its search for a merger partner has been hobbled by looming uncertainty about its exposure to Chevron. Patton Boggs’s very survival, as a standalone firm or through a merger, may have depended on reaching an agreement with Chevron.

Chevron’s detractors, in other words, could reasonably argue that the Patton Boggs settlement is as suspect as the concessions Chevron has extracted from other lawyers, experts and financiers associated with the Ecuadoreans. Chevron, as I’ve said, is a litigation bully. Its weapons are time, money and intimidation. It brought U.S. discovery actions against many of the Ecuadoreans’ allies and sued some of them in the racketeering case it launched against the Ecuadoreans’ lead lawyer, Steven Donziger, in 2011 in Judge Kaplan’s courtroom.

But too many former allies, Patton Boggs now among them, have abandoned Donziger for their actions to be wholly ascribed to Chevron’s ruthlessness. There are the recanting experts who described systemic flaws in the water testing process; the former co-counsel who stopped funding the case in 2009 after Donziger allegedly refused to permit him to investigate Chevron’s allegations about a supposedly independent expert report to the court in Ecuador; and the litigation financier that took a stake in the case but pulled out after concluding Donziger had deceived the firm about the case. All of them have now subjected themselves to perjury in testimony before Kaplan.

And there’s a reason why the Patton Boggs surrender is particularly significant. The firm got into the Chevron case in 2010, after Gibson Dunn had already begun discovery actions against the Ecuadoreans’ experts and advisers. Its lawyers must have understood the risk that Chevron would come after them as well. Presumably, they checked whether Donziger had put forth his best possible case before they signed on, in a deal that gave Patton Boggs a contingent interest in the Ecuadorean court’s soon-to-be-announced judgment. Patton Boggs partner Tyrrell, in particular, is a veteran toxic torts lawyer who must have experience in reviewing expert reports with a skeptical eye. Did he conclude that the scientific evidence developed under Donziger’s leadership — and subsequently disavowed by some of the Ecuadoreans’ experts — was the best the villagers could do?

The absence of evidence isn’t evidence of absence. Maybe testing by untainted, independent experts would reveal contamination in the rainforest that is attributable to Texaco’s operations. (Chevron, to be sure, has presented expert scientific reports that indicate no such contamination.) Here’s the thing, though: Donziger and his team spent more than a decade litigating this case before the Ecuadorean court reached a judgment and, yet, according to Kaplan’s ruling, committed corruption and deception to win it. Would a litigator with a solid case have engaged in such tactics? Why take the risk?

Donziger has appealed Kaplan’s ruling, which grants Chevron an injunction of enforcement of the villagers’ judgment in the United States. The Ecuadoreans continue to pursue enforcement in other countries, including Canada, Brazil and Argentina. (Indeed, one of Patton Boggs’ contributions to the litigation was an aggressive plan for international enforcement dubbed the “Invictus” memo.)

A spokeswoman for Donziger and the villagers sent out a fiery statement on the Patton Boggs settlement that said, in part, “We condemn in the strongest possible terms Chevron’s continuing campaign of extortion and intimidation to retaliate against rainforest villagers for holding it accountable for its environmental crimes in the courts of Ecuador … Patton Boggs is now the latest victim of Chevron’s campaign of intimidation.” Patton Boggs has betrayed its former clients and violated its ethical obligations, the statement said, adding that the Ecuadoreans are “exploring options” to nullify or enjoin the settlement and its terms.

As Judge Kaplan said in his ruling in March, I assume that there is pollution in the Lago Agrio region. (I have never been there, though I’ve seen the disturbing images.) I agree with Kaplan that improvement of the living conditions there is “both desirable and overdue.” I even sympathize with Donziger’s impulse to target the deep-pocketed Chevron and to be enraged as his former compatriots, one after another, have bowed under the oil company’s force. But after years of covering this litigation, I’ve come to believe Donziger couldn’t make a case against the company. Sometimes, bullies are also truth-tellers.

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